3 Types Of Online Marketplaces | Comparison Of Online Marketplaces | 2021 Guide

3 Types Of Online Marketplaces | Comparison Of Online Marketplaces | 2021 Guide

Online marketplaces allow you to sell goods without setting up your online store. Selling through online marketplaces provides a flexible business opportunity with relatively low start-up costs. E-commerce has also seen a great response in the last two years which was spurred on by the outbreak of the Covid-19 pandemic. Approximately five years of predicted gains of the E-commerce business were met in just one year in 2020.

This upward trend proves that E-commerce is not only something for the future but is also our present and for that reason, we have seen multiple new E-commerce sites pop up in recent years. However, to succeed in such a competitive environment is hard and one must engage in in-depth research of the different types of marketplaces before deciding to go all in.

Online marketplace

So what are the 3 main types of online marketplaces? What are the 3 of the most popular marketplaces, and what is their place in the global online market?  Knowing the answer to these questions is very important if you are thinking of launching your own online business.

 

Types of E-commerce Marketplaces

When you want to start a business selling your goods on an online marketplace, you must know that there are three main categories that have been designated on the basis of their target audience. You must be wondering: what are the 3 main types of online marketplaces? They are:

  1. B2B (Business-to-Business) Marketplace
  2. B2C (Business-to-Customer) Marketplace
  3. C2C (Customer-to-Customer) Marketplace

 

B2B (Business-to-Business) Online Market

When answering the question of what are the 3 main types of online marketplaces, the B2B marketplace always comes first since it is the most stable kind of online marketplace. A B2B market provides platforms and opportunities for businesses to sell their products, goods, and services to other businesses.

These dealers tend to supply wholesale goods to other businesses at attractive rates while focusing on generating a bond with their customers. The ability to buy and sell in bulk leads to economies of scale, and the absence of most overheads typically associated with brick-and-mortar businesses helps keep the prices of these products down. Some of the most popular sites of B2B marketplaces include Amazon, Aliexpress, and Alibaba.

The various benefits of using or joining a B2B marketplace are:

  • The opportunity to distribute and sell your goods to a larger customer base

  • Increased opportunities for marketing and selling products

  • The option to start selling your products and services instantly

  • No need for huge investment to start your business

The B2B marketplace is further divided into a vertical marketplace and a horizontal marketplace.

 

B2C (Business-to-Customer) Marketplace

The business-to-customer or B2C marketplace is the one that most people are aware of as it is the most common E-Commerce marketplace today. Some popular E-Commerce platforms that use the B2C model include Amazon, Walmart, Newegg, etc.

Most high-end brands employ their own E-commerce websites to sell their products and services to their loyal customer base without using any B2C external platform. The main difference between the B2B and B2C marketplace is that the former caters to the needs of businesses while the latter sells directly to customers or end-users. However, there are some other significant differences between the two, including:

  • A B2C marketplace strategizes to increase sales by attracting more customers who buy in small quantities to their website while the B2B marketplace focuses less on numbers and more on establishing relationships with their few customers who buy in large quantities.
  • The way of handling and prioritizing delivery, payments, and pricing is also very different between B2B and B2C channels.

 

C2C (Customer-to-Customer) Marketplace

A C2C or customer-to-customer marketplace can be perceived as an online yard sale where a service or product is offered to the customer from another one-on-one. Other than the E-commerce website, there is no mention of the company in the entire process. This kind of marketplace has a very linear flow between the interacting audiences.

The C2C marketplace is often also known as P2P (peer-to-peer or person-to-person) marketplace because of the nature of business. Some of the most important E-commerce sites that use the C2C marketplace model are eBay, Airbnb, and Etsy.

online marketplaces online shopping

What are the 3 Largest Ecommerce Marketplaces in the United States?

Many new online marketplaces have recently appeared on the scene that have gained huge traction. But the three largest E-Commerce marketplaces in the United States remain Amazon, eBay, and Walmart with monthly visits of 2 billion, 689 million, and 389 million people, respectively.

 

What are the Types of Marketplaces?

Most people wonder what are the three main types of online marketplaces and how are they distinguished from each other. Three types of online marketplaces are distinguished on the basis of the nature of their sales. These online marketplaces include:

  • B2B (Business-to-Business) Marketplace
  • B2C (Business-to-Customer) Marketplace
  • C2C (Customer-to-Customer) Marketplace

 

What are 3rd Party Online Marketplaces?

A third-party online marketplace is another type of online platform that provides multiple opportunities to connect with buyers and sellers without having a direct relationship with each other. One of the biggest examples of a third-party online marketplace is Amazon.

 

What are the Examples of Marketplaces?

There are many examples that can be found of an online marketplace. In a time like this when the whole world has moved to selling and buying goods online, some of the most popular platforms are:

  • Amazon
  • eBay
  • Etsy
  • Alibaba
  • Rakuten
  • Runnics
  • Shop

The investment in an online marketplace is relatively small compared to building your own (mobile) shop in a different language with local extensions. These are additional costs when you invest in a platform: You pay a fixed amount per month for your sales account. This amount differs per marketplace. Compare the prices of the marketplaces before you make a choice. Placing the products on the platform is usually free. [1]

With these various types of marketplaces, sellers from around the world are presented with numerous opportunities to increase their business revenue. This is the right time for you to invest in a site and develop your E-commerce channel, especially if you have a variety of goods, products, and services to offer.

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